Jennings v. Wessely Energy Corp.

CORNELIUS, Chief Justice,

concurring.

I concur in the majority opinion and in the disposition of the appeal, but I write separately to elaborate upon the compelling reasons for concluding that the unconstitutionality of Tex.Rev.Civ.Stat.Ann. art. 1299 (Vernon 1925) (repealed 1963) should not be applied retroactively.

An extended discussion of the unconstitutionality of Article 1299 is neither necessary nor material. The dispositive issue in this case is not the constitutionality of that statute. There is no doubt about that — indeed, there is no argument about it. The adoption of Tex. Const, art. I, § 3a, as well as enlightened views of equal protection as guaranteed by the United States Constitution, long ago settled that question in a way gratifying to all of us. Rather, the issue in this case is whether the unconstitutionality of the statute should be applied retroactively to a fact situation prevailing thirty-two years ago, and in a manner that would create chaos by upsetting land titles based on the acts of persons who dealt in good faith reliance on the law as it existed at that time. The answer to that question is “no” for two very important reasons.

First, to apply Tex. Const, art. I, § 3a retroactively would violate both the United States Constitution’s and the Texas Constitution’s prohibitions against impairing the obligation of contracts.1 For the purposes of those constitutional provisions, deeds are contracts, Coolidge v. Long, 282 U.S. 582, 51 S.Ct. 306, 75 L.Ed. 562 (1931); Ap-pleby v. New York, 271 U.S. 364, 46 S.Ct. 569, 70 L.Ed. 992 (1926). And, the impairment clauses apply to state constitutional amendments as well as to state statutes. Langever v. Miller, 124 Tex. 80, 76 S.W.2d 1025 (1934); 16A C.J.S. Constitutional Law § 278 (1984), and cases there cited. Land conveyances are contractual in nature, and the law presumes that persons contract with reference to existing law. In fact, the material law in force when a deed or contract is executed is incorporated into the instrument and becomes a part of it. Langever v. Miller, supra; Winder Bros, v. Sterling, 118 Tex. 268, 12 S.W.2d 127 (1929); Estate of Griffin v. Sumner, 604 S.W.2d 221 (Tex.Civ.App.-San Antonio 1980, writ ref’d n.r.e.). If that law is later repealed, either by statute or by constitutional amendment, it nevertheless governs those transactions which were consummated pursuant to it, and the states are prohibited from applying the changed statute or amendment to impair those rights which have vested under the prior law and contracts. Coolidge v. Long, supra; Appleby v. New York, supra; Langever v. Miller, supra.

Second, although the equal protection clause of the United States Constitution2 would undoubtedly render Article 1299 unconstitutional if that statute existed today, the statute’s invalidity is not to be applied retroactively so as to disturb or abrogate vested rights. As said by the United States Supreme Court:

*815The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 US 425, 442, 30 L ed 178, 186, 6 S Ct 1121; .... It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, — with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination.... [I]t is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. (Emphasis added.)

Chicot Co. Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 84 L.Ed. 329, 60 S.Ct. 317 (1940). And again the court states:

However appealing the logic of Norton may have been in the abstract, its abandonment reflected our recognition that statutory or even judge-made rules of law are hard facts on which people must rely in making decisions and in shaping their conduct. This fact of legal life underpins our modern decisions recognizing a doctrine of nonretroactivity. Appellants offer no persuasive reason for confining the modern approach to those constitutional cases involving criminal procedure or municipal bonds, and we ourselves perceive none. (Emphasis added.)

Lemon v. Kurtzman, 411 U.S. 192, 36 L.Ed.2d 151, 93 S.Ct. 1463 (1973). The Supreme Court and other courts of our nation have consistently refused to retroactively apply a holding of unconstitutionality, even as to the contract or right in controversy, when it would upset relations, titles or rights created in reliance on the statute during the time it was considered valid. These rulings have been applied to bonds and other securities issued or sold under statutes later held to be unconstitutional or otherwise invalid, Cipriano v. Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969); Chicot Co. Drainage Dist. v. Baxter State Bank, supra; County of Green v. Conness, 109 U.S. 104, 3 S.Ct. 69, 27 L.Ed. 872 (1883); Township of New Buffalo v. Cambria Iron Co., 105 U.S. 73, 15 Otto 73, 26 L.Ed. 1024 (1882); Douglass v. Pike County, 101 U.S. 677, 11 Otto 677, 25 L.Ed. 968 (1880), as well as to judgments, Langever v. Miller, supra; elections, Allen v. Board of Elections, 393 U.S. 544, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969), rights of inheritance, Jackson v. Harris, 43 F.2d 513 (10th Cir.1930), and rights to reimbursement for parochial school expenses, Lemon v. Kurtzman, supra. It is even more important that land titles remain settled and inviolate.3 Although Minnie Pearl Rainey’s deed itself did not convey or create any right, the application of Article 1299 to that conveyance affected subsequent conveyances and actions, resulting in vested rights and titles which should not now be defeated by a retroactive application of a finding that the statute according to present-day standards would be unconstitutional.

Kirchberg v. Feenstra, 450 U.S. 455, 101 S.Ct. 1195, 67 L.Ed.2d 428 (1981), is not controlling here. In that case the Supreme Court expressly declined to pass on the propriety of a retroactive application of the *816decision because the question was not before it, and it chose merely to interpret the Court of Appeals decision as applying only to the mortgage actually in controversy. Moreover, the situation in Kirchberg was different from that here. It did not involve intervening rights of subsequent purchasers or innocent holders. Not only does the validity of Minnie Pearl Rainey’s deed depend on our decision, but also the validity of subsequent conveyances and land titles created as a result of Article 1299’s effect on her deed and in reliance on that statute.

For these additional reasons, I support the disposition of this case.

. U.S. Const, art. I, § 10, cl. 1 provides:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Tex. Const, art. I, § 16 provides:

No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made. (Emphasis added.)

. U.S. Const, amend. 14, § 1 provides:

All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

. The vesting and settling of land titles is an important public policy consideration and goal of the law. See, e.g., West v. Hapgood, 169 S.W.2d 204 (Tex.Civ.App.-Fort Worth), aff’d, 141 Tex. 576, 174 S.W.2d 963 (1943).